The US’ Verizon Communications is to write off $2.5 billion from its balance sheet due to the disappointing performance of its investments. $500 million of the charge comes from to new accounting rules, which have replaced the amortization of goodwill with a system of periodically reviewing impairment.
The remainder of the write-off will reflect the fall in global market values. Verizon’s investments in Venezuela’s CANTY, Argentina’s CTI Holdings, and Metromedia Fiber Networks in the US, have all been hit. Verizon now regards Metromedia as ‘not solvent’ after it cancelled a $350 million fiber-optic deal.
The announcement follows similar write-offs by Japan’s NTT and Vodafone.
Verizon also says that Q1 results, to be announced on April 23, will be in the lower range of analyst expectations.